Question 1

Which of the following groups would be most adversely affected by food aid?

Accepted Answer

A) Manufacturers in the country providing aid 
B) Citizens in the country receiving aid 
C) Government in the country receiving aid 
D) Farmers in the country providing aid 
E) Farmers in the country receiving aid 
A) Manufacturers in the country providing aid 
B) Citizens in the country receiving aid 
C) Government in the country receiving aid 
D) Farmers in the country providing aid 
E) Farmers in the country receiving aid

Question 2

Which of the following is least likely to be included in a definition of basic human needs?

Accepted Answer

A) A minimal level of clothing 
B) A minimal level of health care 
C) A minimal level of savings 
D) A minimal level of shelter 
E) A minimal level of calorie intake 
A) A minimal level of clothing 
B) A minimal level of health care 
C) A minimal level of savings 
D) A minimal level of shelter 
E) A minimal level of calorie intake

Question 3

The host country's balance-of-payments problem tends to worsen when foreign firms:

Accepted Answer

A) invest solely in capital-intensive industries. 
B) repatriate their profits to the headquarters from the host country. 
C) acquire the foreign operations in order to diversify corporate investment holdings. 
D) refuse to share technological expertise with the host country. 
E) export all products to other countries. 
A) invest solely in capital-intensive industries. 
B) repatriate their profits to the headquarters from the host country. 
C) acquire the foreign operations in order to diversify corporate investment holdings. 
D) refuse to share technological expertise with the host country. 
E) export all products to other countries.

Question 4

Because of the absolutism concept of poverty, a poor family in the United States will fall within the same category as a poor family in Cuba.

Accepted Answer

A) True 
 B)False

Question 5

No government that receives foreign aid sells products to its people.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true?

Accepted Answer

A) Multinational firms tend to reduce the flow of technology between countries. 
B) Most foreign direct investment is found in labor-intensive industries. 
C) Multinationals do not always help to reduce the trade deficit of the host country. 
D) Foreign firms contribute to a significant increase in the host country's employment rate. 
E) Foreign direct investment reduces the stock of capital of the domestic country. 
A) Multinational firms tend to reduce the flow of technology between countries. 
B) Most foreign direct investment is found in labor-intensive industries. 
C) Multinationals do not always help to reduce the trade deficit of the host country. 
D) Foreign firms contribute to a significant increase in the host country's employment rate. 
E) Foreign direct investment reduces the stock of capital of the domestic country.

Question 7

Inward-oriented development strategies focus on exports of goods and services.

Accepted Answer

A) True 
 B)False

Question 8

Statistics show that countries with the lowest rates of economic growth have a strong outward-oriented development strategy.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following sentences about entrepreneurs stands true?

Accepted Answer

A) They tend to be risk-averse individuals. 
B) They are more frequently found in societies that support social conformity. 
C) They help achieve technological progress. 
D) They always come from blocked minorities. 
E) They usually belong to the traditional elite class. 
A) They tend to be risk-averse individuals. 
B) They are more frequently found in societies that support social conformity. 
C) They help achieve technological progress. 
D) They always come from blocked minorities. 
E) They usually belong to the traditional elite class.

Question 10

The replacement of foreign manufactured goods by domestically manufactured goods is called _____.

Accepted Answer

A) import swap 
B) export substitution 
C) primary production 
D) import substitution 
E) trade protectionism 
A) import swap 
B) export substitution 
C) primary production 
D) import substitution 
E) trade protectionism

Question 11

Which of the following stands true of corruption?

Accepted Answer

A) Payment of money or gifts in order to receive a government service or benefit is a widespread practice only in less-developed countries. 
B) Corruption reduces growth most directly through government investment in projects with high productivity. 
C) Corrupt governments spend less on capital goods than governments that are less corrupt. 
D) The more competitive a country's markets are, the fewer the opportunities for corruption. 
E) Private investment is relatively higher in countries in which government expenditure is very high. 
A) Payment of money or gifts in order to receive a government service or benefit is a widespread practice only in less-developed countries. 
B) Corruption reduces growth most directly through government investment in projects with high productivity. 
C) Corrupt governments spend less on capital goods than governments that are less corrupt. 
D) The more competitive a country's markets are, the fewer the opportunities for corruption. 
E) Private investment is relatively higher in countries in which government expenditure is very high.

Question 12

Generally speaking, the more competitive a country's markets are, the greater are the opportunities for corruption.

Accepted Answer

A) True 
 B)False

Question 13

As an effect of population growth, age dependency is:

Accepted Answer

A) reduction in the amount of capital per worker, which lowers the productivity of labor. 
B) shifts in government expenditures from the country's infrastructure to education and health care. 
C) a large number of dependent children, whose consumption requirements lower the ability of the economy to save. 
D) high mortality rates of middle-aged workers that reduces the average amount of investment spending. 
E) survival of the elderly who are dependent on government welfare support. 
A) reduction in the amount of capital per worker, which lowers the productivity of labor. 
B) shifts in government expenditures from the country's infrastructure to education and health care. 
C) a large number of dependent children, whose consumption requirements lower the ability of the economy to save. 
D) high mortality rates of middle-aged workers that reduces the average amount of investment spending. 
E) survival of the elderly who are dependent on government welfare support.

Question 14

To have significant foreign direct investment, a developing country ought to have a stable system of property rights.

Accepted Answer

A) True 
 B)False

Question 15

A narrowly conceived physical quality-of-life index attempts to measure:

Accepted Answer

A) gross national income. 
B) absolute poverty levels. 
C) social injustice. 
D) technological progress. 
E) living standards. 
A) gross national income. 
B) absolute poverty levels. 
C) social injustice. 
D) technological progress. 
E) living standards.

Question 16

Which of the following is the least likely reason for the difficulty in measuring poverty across countries?

Accepted Answer

A) Different currencies 
B) Different customs 
C) Different living arrangements 
D) Different trade balances 
E) Limited data 
A) Different currencies 
B) Different customs 
C) Different living arrangements 
D) Different trade balances 
E) Limited data

Question 17

Why is the fear of expropriation an obstacle to economic growth?

Accepted Answer

A) Without research and development, no technological advances can be made. 
B) Large government spending causes negative externalities. 
C) Powerful special interest groups have too much control. 
D) Because of the lack of guarantees, no foreign investment comes to the country. 
E) Because of this fear, too many resources are devoted to military spending which is a highly unproductive sector. 
A) Without research and development, no technological advances can be made. 
B) Large government spending causes negative externalities. 
C) Powerful special interest groups have too much control. 
D) Because of the lack of guarantees, no foreign investment comes to the country. 
E) Because of this fear, too many resources are devoted to military spending which is a highly unproductive sector.

Question 18

The Taiwanese government allows tax credits for domestic producers who compete with manufacturers in First World nations.This suggests that Taiwan engages in _____.

Accepted Answer

A) trade protectionism 
B) export substitution 
C) foreign exchange market intervention 
D) import substitution 
E) voluntary export restrictions 
A) trade protectionism 
B) export substitution 
C) foreign exchange market intervention 
D) import substitution 
E) voluntary export restrictions

Question 19

Foreign aid usually consists of funds loaned at high interest rates.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following refers to a shift in government spending from the country's infrastructure to education and health care?

Accepted Answer

A) Capital shallowing 
B) Expropriation 
C) Age dependency 
D) Investment diversion 
E) Import substitution 
A) Capital shallowing 
B) Expropriation 
C) Age dependency 
D) Investment diversion 
E) Import substitution

Exam 29: Development Economics

Which of the following groups would be most adversely affected by food aid?

Which of the following is least likely to be included in a definition of basic human needs?

The host country's balance-of-payments problem tends to worsen when foreign firms:

Because of the absolutism concept of poverty, a poor family in the United States will fall within the same category as a poor family in Cuba.

No government that receives foreign aid sells products to its people.

Which of the following statements is true?

Inward-oriented development strategies focus on exports of goods and services.

Statistics show that countries with the lowest rates of economic growth have a strong outward-oriented development strategy.

Which of the following sentences about entrepreneurs stands true?

The replacement of foreign manufactured goods by domestically manufactured goods is called _____.

Which of the following stands true of corruption?

Generally speaking, the more competitive a country's markets are, the greater are the opportunities for corruption.

As an effect of population growth, age dependency is:

To have significant foreign direct investment, a developing country ought to have a stable system of property rights.

A narrowly conceived physical quality-of-life index attempts to measure:

Which of the following is the least likely reason for the difficulty in measuring poverty across countries?

Why is the fear of expropriation an obstacle to economic growth?

The Taiwanese government allows tax credits for domestic producers who compete with manufacturers in First World nations.This suggests that Taiwan engages in _____.

Foreign aid usually consists of funds loaned at high interest rates.

Which of the following refers to a shift in government spending from the country's infrastructure to education and health care?

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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